US Crypto Exchange Kraken Mulls SEC Registration

Kraken may seek registration as broker dealer and ATS with SEC, expects clarity on coin regulations

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17 May • 2 mins
In News

US cryptocurrency exchange Kraken said it would probably seek registration as a broker dealer and further as an alternative trading system (ATS) with the US Securities and Exchange Commission (SEC), chief executive officer Jesse Powell told Bloomberg in an interview on Tuesday.

 

Before registering with SEC, the exchange hopes to see better clarity by the regulator regarding which cryptocurrencies are securities and how they can trade legally, Powell said adding that SEC could give some kind of amnesty for coins that are deemed illegal securities.

 

Recently the SEC has said that the platforms that support trading in digital assets deemed to be securities will need to register with it as a national exchange or qualify for an exemption.

 

Alternative trading systems operate outside traditional stock exchanges and focus on finding counterparties for transactions by matching orders electronically. Under US legislation, the ATS must be approved by SEC.

 

Powell is known for his hostility towards the attempts of market watchdogs and the New York state authorities, in particular, to regulate the cryptocurrency exchanges through the introduction of a framework called New York BitLicense in 2015. Kraken decided not to pursue it, because it was too expensive and unwieldy, ceasing operations in the state of New York two weeks after its introduction. Kraken is registered as a money service business in most US states.

 

A month ago Powell had another round of hostilities with state authorities namely New York Attorney General (NYAG) offices Investor Protection Bureau. The NYAG sent letters to cryptocurrency platforms demanding that they answer a lengthy questionnaire on how the platforms operate. Powell bluntly refused, saying the demands were unreasonable and ill-prepared, the deadline was too short and described the whole initiative as a “publicity stunt”. However, Powell noted, this does not mean that he is against regulation and cooperation with authorities.

 

Kraken is a major cryptocurrency exchange founded in 2011. It is available in most US states, Canada, the EU and until recently – Japan. The platform has an extensive instrument portfolio of coins that can be traded against each other or for fiat currencies and supports trading on margin.